VinFast has requested India to lower import duties on its cars for about two years, allowing customers to familiarize themselves with its products while a local manufacturing plant comes online, an executive said on Sunday.
VinFast has commenced the construction of a factory in the southern state of Tamil Nadu and aims to begin production by mid-next year, focusing initially on domestic sales before venturing into exports, VinFast’s India CEO Pham Sanh Chau told Reuters.
See also: VinFast Officially Begins Construction of Electric Vehicle Facility in India’s Tamil Nadu
Last month, VinFast and Tamil Nadu announced their agreement to pursue an investment of up to $2 billion, with an initial commitment of $500 million for the project’s first five years.
Similar to Tesla, VinFast has also sought a reduction in India’s 100% import duty on fully-built EVs, a request contested by local automakers. India, the world’s third-largest vehicle market, is deliberating these requests but has yet to reach a decision, according to a government official.
“We … proposed a reduction of import duty tax … for instance by bringing it to 70% to 80% just for two years and for a very limited number of cars in order for the customers to get used to our products,” Pham Sanh Chau stated on the sidelines of VinFast’s groundbreaking ceremony in Thoothukudi district. “The central government is still considering it. But while waiting for the final decision of the central government, we move ahead with our construction of the manufacturing facility.”
See also: VinFast and Tamil Nadu State Government Sign $2 Billion MOU for Electric Vehicle Facility
Electric vehicles comprised just about 2% of India’s car sales last year, but the federal government aims for this figure to reach 30% by 2030, actively working on a program to attract EV manufacturers.
The Tamil Nadu project is expected to have a capacity of up to 150,000 vehicles annually, compared with 250,000 at its main plant in Vietnam, VinFast revealed.
Pham Sanh Chau, a former Vietnamese ambassador to India, stated that the company is already closely collaborating with approximately 55 Indian dealers to establish a sales network and may also consider introducing its two-wheeler models in the country in the future.
